CMS Easing Rules on Medicaid Changes

WASHINGTON -- The Obama administration is trying to allow states greater flexibility to change their Medicaid programs without asking the federal government for special waivers, a top health official said here Thursday.

For example, the Centers for Medicare and Medicaid Services (CMS) has tried to ease regulations in recent months -- beginning last August -- to allow states to create integrated delivery models for Medicaid without such waivers, Cindy Mann, JD, said at a meeting of the Medicaid and CHIP Payment and Access Commission (MACPAC).

More recently, CMS allowed states to increase patient cost-sharing for using nonpreferred drugs or making unnecessary emergency department visits, said Mann, who is director of Medicaid and the Children's Health Insurance Program (CHIP) at CMS.

"Of course, much of this is at the instigation and creativity of states and the changes in the marketplace, saying 'Wait a minute. We should be doing things a little bit differently,' " Mann said. "The program is one that is a living, breathing program. It's always changing. Congress is making changes. We're making changes."

Waivers may still be needed, however, to sidestep statutory requirements of the federal law dictating Medicaid and CHIP, Mann said.

CMS has 65 section 1115 waivers currently in place. The waivers, which have the approval of the Secretary of Health and Human Services, allow states to embark on demonstration projects to redesign and improve their Medicaid programs.

The agency also has 320 section 1915c waivers in place, which give states flexibility in offering long-term-care services.

But too often states are unaware of the changes they can make to their Medicaid programs without going through CMS' waiver process. "There's little appreciation sometimes of the flexibility of the Medicaid program," Mann said.

Commissioner Sara Rosenbaum, JD, founding chair of the department of health policy at George Washington University here, noted that CMS seems to be returning Medicaid to being a flexible federal program, with waivers used as a way to fill the gaps.

She later suggested the commission look into suggesting long-term waivers for states that prove their efforts are worthy of less federal oversight. Today, the waivers are needed every 3 to 5 years.

Mann also said CMS is working toward streamlining its waiver-approval process trying to make it faster to approve waivers similar to those CMS has considered in the past. The agency is doing this through modules of similar waiver applications to provide states with guidance on what CMS is needing for approval.

The agency is also trying to align quality improvement and evaluation plans among Medicare, states, and private insurers, while also simplifying enrollment and eligibility determination.

Most importantly, Mann said, CMS is working to increase the transparency and add public input to its approval process.

For example, the Affordable Care Act (ACA) now mandates that states release their proposals for public comment before submitting them to CMS. The federal government must also publish waivers before it enacts them.

"The waiver process has long been criticized as this inter-working deal that's cut between the federal government and the executive body at the state level," Mann said.

A lack of transparency and public input was one problem addressed by the Government Accountability Office (GAO) in the watchdog's review of CMS' waiver process, Katherine Iritani, director of health issues at the GAO, told MACPAC Thursday.

"Given the significant federal expenditures governed by these demonstrations, there's a need for improved accountability and transparency in HHS' review and approval process," Iritani said.

The GAO is expected to release next month an updated report on waivers approved since 2007.

The MACPAC panel also heard an update on the use of premium assistance as a mechanism for Medicaid expansion under the ACA.

The update focused on Arkansas. That state is trying to use premium assistance to move its childless adults -- who would normally be eligible for Medicaid when that program is expanded -- into the state's health insurance exchange, where they would purchase private insurance instead.

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